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Do I Need Full Coverage Insurance On A Used Car?

A majority of the states are going to require that you have liability coverage with your auto insurance plan. As far as if you should take that to full coverage if you have a used vehicle, most carriers are going to recommend that you have both if you fall in the following categories:

  • If you hold a loan or a lease for your car
  • If your car is less than ten years old
  • If your car has a value over $3,000

If you are leasing or financing your car, it is most likely a requirement of the agency who holds the loan/lease that you have full coverage for the vehicle. The agency is going to want to have protection over their investment in order to ensure there will be enough funds that the vehicle will be able to have repairs done should they be needed.

A vehicle that is more valuable than $3,000 and which is less than 10 years old is recommended to have full coverage. Comprehensive/collision estimates average out to upwards of approximately $700 annually or higher depending on the car which would equal nearly $3,500 over a five-year span. A car that is valued at less than $3,000 would mean that you are spending more to insure it than it is actually worth. You can get the approximate value of your vehicle by way of the Kelley Blue Book. After you get the quotes for your coverage, you’ll be better able to determine if having full coverage is worth the money or not.

Comprehensive Coverage

Comprehensive insurance alone is something that should be heavily considered regardless of the value of your vehicle. It reimburses for many more perils than collision does which includes the ultimate peril of theft. Despite what your car may be worth, having it taken away from you can be devastating. Even if the car only has a value of approximately $2,500, if it comes up missing and your carrier gives you $2,000 back, that reimbursement will go far when you’re in the market for a replacement. Typically, the comprehensive expense can range approximately $200 each year and a payout of $2,000 would deem it as valuable coverage.

The damages that are typically covered under a comprehensive plan include (minus fender benders):

  • Civil commotion, fires, explosion
  • Natural disasters including tornado, storm, hurricane
  • Theft and vandals
  • Animal impact, e.g. deer. If you swerve in order to miss a deer and have a crash, that would likely go under collision
  • Glass, e.g. shattered/broken windows or windshield
  • Fallen objects
  • Terrorist acts


Collision reimbursement is going to be optional and will be based on whether you feel your car holds enough value to pay the price for the insurance to cover it. It should be valued at no less than $3,000 and be, again, less than 10 years of age to make sense. 

Most of your car accidents or auto crashes are going to fall in this category whether you are involved in hitting another car or you crash into a stationary object, collision coverage will reimburse for your damages. Things that may be covered under the collision portion of your auto insurance plan are:

  • You run into another vehicle or another vehicle rams into you while you’re sitting still or are parked
  • You lose control and hit a fixed object like a telephone pole or a tree or a streetlamp
  • You drive into a ditch or a large pothole
  • You lose control and flip your car over
  • You’re in a situation where you’re unable to use uninsured motorist reimbursement and you have a hit-and-run

There are benefits to those who are able to use collision coverage but the primary one is that when you do report a claim using this coverage, you can receive payout no matter who was at fault for the accident. These claims are generally paid out much quicker than any property damage claims as the insurance company is not straddled with determining the fault. You are also fortunate in being able to only deal with your direct insurance carrier as opposed to any other insurer who would have less of an incentive to reimburse. Collision is also able to be used in instances of rental cars in a majority of cases which will allow you to avoid having to use rental insurances.


The main thing to remember with your used car, despite the value, if you finance or lease the vehicle, you will be expected to have full insurance regardless. This will be a condition of your loan for the duration of your loan and if the insurance lapses, you run the risk of your lender repossessing or taking out a plan on your behalf. The lender has an obligation to protect their investment.